SCE’s 2018 Aliso Canyon Energy Storage 2 Request for Offers · SCE’s 2018 AlisoCanyon Energy...

SCE’s 2018 Aliso Canyon Energy Storage 2

Request for Offers

(“ACES 2 RFO”)

Bidders Conference

September 4, 2018

Skype Link (for the presentation only):

https://meet.lync.com/edisonintl-sce/tamara.l.rodriguez/1SMTGM0V

Call-in Information (Participants MUST dial in to receive audio):

Number: 800-857-9632

Participant Passcode: 9308122

https://meet.lync.com/edisonintl-sce/tamara.l.rodriguez/1SMTGM0V

Southern California Edison

Agenda

• RFO Overview (10 min)

• Product and Eligibility Overview (15 min)

• Offer Valuation (15 min)

• Customer Composition (10 min)

• RFO Website Overview (5 min)

• Final Questions / Webinar Conclusion (15 min)

2

• A Q & A session will follow each section presentation. To ask a question, press *1

and wait for the prompt from the operator.

• You may also submit a question by sending an email to: [email protected]

mailto:[email protected]

RFO OverviewMatt LloydOrigination - RFO Co-Lead


RFO Overview - Webinar Purpose

4

• In this Webinar, SCE will provide information to help potential bidders in understanding the need and purpose of the ACES 2 RFO, as well as understanding the RFO process and how to submit bids

• There is time allotted for Q&A after each section

• After the webinar, SCE will post this presentation and a recording of the webinar on the ACES 2 RFO website - https://www.sce.com/acesrfo

• This presentation is intended to be a summary level discussion of the information and requirements established in the ACES 2 RFO and does not include all of the detailed information that can be found in the documents posted to the ACES 2 RFO website

• To the extent that there are any inconsistencies between the information provided in this presentation and the information contained in the documents posted to the website, the information in the documents posted to the website will govern

https://www.sce.com/acesrfo


RFO Overview – High Level Summary

• On October 14, 2017, Senate Bill 801 was signed into law, which directed SCE to solicit a minimum 20 MW of energy storage resources to help address electrical system operational limitations from reduced gas deliverability from the Aliso Canyon natural gas storage facility

• Both In-Front-of-Meter (IFOM) and Behind-the-Meter (BTM) Demand Response energy storage resources are eligible

o Must be capable of providing a four-hour duration resource adequacy service and be dispatchable, in line with SB 801 requirements

• Projects can be located anywhere in SCE’s service territory, south of Path 26, with “preferred locations”

o Certain substations within the Moorpark Sub Area and Western LA Basin Sub Area

5

Southern California Edison 6

RFO Overview - RFO Structure

This RFO will employ a 2-step selection process:

• Offerors will submit initial prices prior to initial offer submittal deadline

• SCE will evaluate, shortlist, and negotiate contract terms with the shortlisted offers

o Will employ its Least-Cost, Best-Fit (“LCBF”) valuation

methodology

• Shortlisted offerors who have successfully negotiated contracts will submit last, best, and final prices/offers

o Again, SCE will employ its LCBF valuation methodology

o SCE will make final selection decisions from these final offers



RFO Overview - Independent Evaluator

• Merrimack Energy is the Independent Evaluator (IE) for this solicitation

o The key contacts are Wayne Oliver ([email protected]) and Keith Oliver ([email protected])

• Role of the IE is to ensure fair and equal treatment of all bidders by:

o Monitoring SCE’s solicitation and negotiation processes

o Monitoring SCE’s valuation methodologies and selection processes

• The IE is privy to all Offers, invited to participate in all negotiations and must be copied on all correspondence between SCE and bidders

7

Offerors must include IE on email correspondence to SCE




RFO Overview - RFO Schedule*

Southern California Edison*Dates and Milestones are subject to change

Date RFO Event

Friday, August 31, 2018 RFO Launch

Tuesday, September 4, 2018 Bidders’ Conference

Thursday, September 27, 2018

(12:00 p.m.)Offeror’s Initial Offer Submittal Deadline to SCE

Tuesday, November 13, 2018 Target Date for SCE to issue Shortlist Notification

Friday, December 14, 2018

(12:00 p.m.)Commercial Lockdown Deadline

Friday, December 21, 2018 PSA Negotiation Period Ends

Friday, January 18, 2019

(12:00 p.m.)Offerors’ Final Price Submittal Deadline

Monday, February 11, 2019 SCE’s Target Date for Final Selection Notification

Monday, February 18, 2019 Deadline for Awarded Offerors to Execute PSAs

Tuesday, March 26, 2019 Target Date for Advice Letter Filing

Product and Eligibility OverviewGene LeeOrigination - RFO Co-Lead


• Open to the following energy storage product types:o IFOM Energy Storage (RA Only)

o IFOM Energy Storage (RA with Put)

o BTM Demand Response

• Must be new (not existing nor repowered)

• Must be capable of providing a four-hour duration dispatch, available between 4 PM to 9 PM (HE17 to HE21), and accepting and executing dispatch commands

• Project size must be at least 1 MW

• Delivery start date by 06/01/2021 (Includes attaining Net Qualifying Capacity for IFOM projects)

• Preference for Offers that do not exceed a 10 year term. For Offers with a contract term greater than 10 years, must also provide a mutually exclusive offer with a 10 year or less term

• Must be proven, commercialized technology

• Offerors must be experienced developers

10

General Project Eligibility


• Located anywhere in SCE’s service territory, south of Path 26

• Preference for projects located in Disadvantaged Communities

• Preference for projects in “preferred locations” that enhance both gas system and electrical system performance and reliability o Moorpark Sub Area

Goleta 220/66 kV

Santa Clara 220/66 kV

o Western Los Angeles Basin Sub Area

El Nido 220/66 kV

La Cienega 220/66 kV

La Fresa 220/66 kV

Laguna Bell 220/66 kV

Villa Park 220/66 kV

o Projects that are located in the Moorpark Sub Area will receive a greater qualitative benefit because they are able to meet the local capacity requirements (LCR) need identified by CAISO

Must achieve delivery start date of 03/01/2021 to meet the LCR need in that area and receive an associated qualitative benefit

11

Location Eligibility


• Offerors who previously submitted energy storage-based Offers

for the 2018 Moorpark Local Capacity Requirements/Goleta

Resiliency Request for Proposals are strongly encouraged to also

submit Offers for the 2018 ACES 2 RFO

o Must indicate whether Offers are mutually exclusive of each other

between the two solicitations

o If Offers submitted into the two solicitations have different prices for

the same project, Offerors are required to substantiate the difference

in pricing

o Offers CANNOT be submitted mutually inclusive of each other across

solicitations

12

Location Eligibility (cont’d.)


• IFOM projects must be able to demonstrate that they have participated in the interconnection study process. Fulfillment of this requirement can be achieved by submitting to SCE evidence which includes one of the following:

a) Fast Track Review report demonstrating the project has “passed” the respective Initial Review Fast Track screens;

b) Minimum of a completed Phase I Interconnection Study Report in the cluster study process (for projects in Queue Cluster 10 or earlier) or a System Impact Study Report in the independent study or detailed study process;

c) Signed interconnection agreement for Full Capacity Deliverability Status, or for Energy Only Deliverability Status with the demonstration that it has entered into a request for Full Capacity Deliverability Status into one of the deliverability assessment processes described in (a) above; or

d) Has entered into the Queue Cluster 11 interconnection process and can provide proof of a complete and active QC11 interconnection request from SCE and/or CAISO

• An interconnection request with Full Capacity Deliverability Status is a requirement of this RFO

• Interconnection studies or interconnection agreement must support the project’s forecasted COD

13

Interconnection Eligibility

Offer ValuationMichael FreemanEnergy Procurement Planning & Valuation


• SCE incorporates “Least-Cost, Best-Fit” principles by accounting for quantifiable attributes explicitly in the valuation process (“Least-Cost”) while qualitative attributes are accounted for implicitly in the selection process (“Best-Fit”)

• SCE will estimate the Net Present Value (NPV) of each offer by calculating discounted value of contract benefits minus the costs required to receive those benefits over the contract delivery period

• The selection process employs the NPV metric described above and SCE will run a rank-ordering or an optimization (along with other qualitative considerations) to develop possible selection sets

Valuation - Introduction

15


Quantitative Valuation Components• Methodology

- SCE will develop price forecasts (P) for various market attributes such as capacity and energy. SCE will also calculate the forecasted quantity (Q) of the respective attribute provided by an offer over the contract delivery period. Then, the benefits stream will be estimated by P x Q, which is netted against the costs

- Benefits are described on slides 16 & 17; cost are described on slide 18

Component Definition P Q

Resource

Adequacy

Value

Value of the RA

capacity attribute

that can be

counted towards

SCE's RA

compliance

requirement

RA Price Forecast

Based on SCE's assessment of RA

market prices

SCE considers its net short RA position while

determining RA quantity to ascribe to the

offers

Based on CPUC definition of RA eligibility

requirements for storage resources

Energy

Value

Market value of

delivered energy

or energy savings

Energy Price Forecast

Based on forward market traded

prices from broker quotes in the

short run blended with

fundamental prices from unit

commitment dispatch model in the

long run

For dispatchable resources, SCE uses its

dispatch models to determine the most

economic dispatch of the resource given the

market conditions and resource's operating

characteristics and constraints

Note: be aware that a low Energy Rate bid in

the Demand Response product may result in

the project getting dispatched frequently

16


Quantitative Valuation Components

Component Definition P Q

AS/RT

Value

Market value of

Ancillary Services

(AS) capacity and

Real Time (RT)

energy delivery

AS/RT price forecast

Based on statistical

regression model and

fundamental model

Includes reg-up, reg-down,

spin, non-spin and real-

time energy prices

Based on offer’s AS capacity

and SCE's dispatch model that

performs co-optimization of

energy and AS

Deferral

Value

If offers are

determined to defer

distribution upgrade

need, offers will

receive the deferred

cost as an implicit

benefit

Distribution upgrade

project cost estimate and

deferral need will be used

to estimate normalized

dollar value

Offer's delivery time period

alignment with deferral need

time period of the given

substation/circuit

17


Quantitative Valuation Components

Component Definition Methodology

Contract

Payments

Includes capacity payments, energy

payments

Estimated from contract capacity

rate and capacity, and/or energy rate

and projected delivery

T&D Upgrade

Cost

Transmission & Distribution network

upgrade costs that are reimbursed by SCE,

or any Transmission Provider under the

jurisdiction of the CAISO

SCE uses Offeror's supplied

aggregate network upgrade cost,

and annualizes them by using SCE’s

discount rate and taxes over the

expected life of the asset

Debt

Equivalence

Cost

It is the term used by credit rating agencies

to describe the fixed financial obligation

resulting from long-term purchased power

contracts

SCE uses the Standard & Poor’s

methodology along with CPUC

prescribed 20% risk factor, to

estimate the financial obligation

resulting from the contracts

18


Network Upgrades Cost Information

• In the IFOM energy storage Offer Workbook, Offerors are asked to enter their ‘Total Reimbursable Network Upgrade Costs’

o These costs may include reliability network upgrade costs, area delivery network upgrade costs, and local delivery network upgrade costs

o Offerors instructed to base this total dollar amount on the latest interconnection study applicable to the Project

If no study exists, then the amount should be based on a qualified interconnection specialist’s/consultant’s estimate

o The following are not reimbursable by SCE and should not be included:

Distribution Provider’s Interconnection Facilities

Distribution Upgrades


• Project location in a Disadvantaged Community

• Project location at a Preferred Substation

• Initial delivery date

• Contract term length

• Permitting and interconnection

• Pre-development & development milestones

• Portfolio fit of energy, capacity, & term

• Offeror concentration

• Technology concentration

Qualitative Valuation Components

20

Customer CompositionJanice WangCustomer Service

Moorpark Sub Area


Goleta Substation

23


Santa Clara Substation

24

Santa Clara

Peak day HourPeak Load

(MW)

24-Oct-17 14:00:00 496

Western Los Angeles Basin Sub Area


El Nido Substation

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Non-Residential, 10,252 , 12%

Residential, 73,126 , 88%

Customer Composition

Non-Residential Residential

0

50

100

150

200

250

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Usa

ge (

MW

)

Hour

Load Profile by Sector - El Nido

NON-RESIDENTIAL RESIDENTIAL

El Nido

Peak Day HE Peak Load (MW)

24-Oct-17 15:00:00 231


La Cienega Substation

27

NON-RESIDENTIAL, 15,585 , 14%

RESIDENTIAL, 95,556 , 86%


NON-RESIDENTIAL RESIDENTIAL -

50

100

150

200

250

300

350

400

450

500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Usa

ge (

MW

)

Hour

Load Profile by Sector - La Cienega

NON-RESIDENTIAL RESIDENTIAL

La Cienega


24-Oct-17 15:00:00 436


La Fresa Substation

28

AGRICULTURAL, 382 , 0%

COMMERCIAL, 21,421 , 11%

INDUSTRIAL, 1,760 , 1%



AGRICULTURAL COMMERCIAL INDUSTRIAL RESIDENTIAL -

100

200

300

400

500

600

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Usa

ge (

MW

)

Hour

Load Profile by Sector - La Fresa

AGRICULTURAL COMMERCIAL INDUSTRIAL RESIDENTIAL

La Fresa


24-Oct-17 16:00:00 489


Laguna Bell Substation

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AGRICULTURAL COMMERCIAL INDUSTRIAL RESIDENTIAL -

50

100

150

200

250

300

350

400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Usa

ge (

MW

)

Hour

Load Profile by Sector - Laguna Bell


Laguna Bell


24-Oct-17 15:00:00 360


Villa Park Substation

30







-

100

200

300

400

500

600

700

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Usa

ge (

kW)

Hours

Load Profile by Sector - Villa Park


Villa Park


24-Oct-17 16:00:00 636

RFO Website and Offer SubmissionMatt LloydOrigination - RFO Co-Lead


• The RFO Website is located at www.sce.com/ACESRFO, and is where all

documents are available for download, including:o RFO Instructions

o Product Pro Formas

o All other required Offer submittal materials

• The primary communication method for asking questions and submitting

Offer materials will be via email at [email protected] Respondents must copy the IE at [email protected] and

[email protected] on all correspondence

• A complete and conforming Offer package must consist of:o A completely filled-out Bidder Information Workbook

o A completely filled-out Offer Workbook(s)

o Seller Proposal Letter

o Non-Disclosure Agreement

o PSA Term Sheet (if applicable)

o Developer Experience Attestation

o MUA Services Questionnaire

o Mutual Exclusivity-Inclusivity Template

o Consent for Release of Interconnection-Related Information (for IFOM projects)

o Deemed Complete Interconnection Application -or- Latest Interconnection Study (for

IFOM projects)

RFO Website Overview

32

http://www.sce.com/ACESRFO




Final Questions / Conclude WebinarThank you!

SCE’s 2018 Aliso Canyon Energy Storage 2 Request for Offers · SCE’s 2018 AlisoCanyon Energy...

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